Estadão: Cannabis attracts top executives and businesses in Brazil
In addition to its well-known medical use, the plant is used in its entirety in the manufacture of raw materials for the cosmetic, textile, food and beverage industries and even in civil construction.
The growth of the cannabis market for therapeutic use around the world has attracted the attention and investments of many entrepreneurs and executives in Brazil. It is a market estimated by Fortune Business Insights, globally, at US$ 28 billion last year, and could reach US$ 197 billion in 2028. In addition to its medical use, the plant is also used in its entirety in the manufacture of raw material for the cosmetics, textile, food and beverage industries and even civil construction, which justifies the growing interest in this segment.
Claudio Lottenberg, former president of the Albert Einstein hospital and current chairman of the entity’s board, had been following the substance’s advances in medicine for several years, until, last year, he decided to bet on his own cannabis business. Today, he is a partner at Zion MedPharma, a producer of medicines with the substance. According to him, there is no doubt about the therapeutic potential, but it is still necessary to overcome the barrier of lack of knowledge and information.
“When myopia surgeries started, they also faced prejudice, as they were seen as aesthetic. Then it normalized. A similar thing happened with bariatric surgery. These biases have always existed and need to be broken for medicine to evolve,” he says.
Alongside Lottenberg in charge of Zion is Dirceu Barbano, former president of the National Health Surveillance Agency (Anvisa). He, who signed the first authorizations for the importation of cannabis in Brazil and was one of those responsible for opening the body to the discussion of the issue, had no doubts when the opportunity to invest in the cannabis market knocked at his door. Today, Zion has its market value estimated at R$ 60 million.
Former executive director of Alemão Oswaldo Cruz Hospital, Allan Paiotti, who has also held management positions in technology, logistics and investment companies, entered this market last year. “When I contacted the world of medical cannabis, I was super impressed with its therapeutic potential and with Brazil’s somewhat delay in this subject. So, I decided to put things together,” he says, referring to his decision to co-found Cannect, a medical and cannabis-based marketplace, where he serves as president.
Abroad, they are not just executives in the health sector. Entire pharmaceutical groups have already placed their bets on cannabis. Pfizer and Jazz Pharmaceuticals spent about $7 billion each in acquisitions last year. But in Brazil, even due to the legal uncertainty surrounding the issue – since marijuana, considered illegal in the country, is one of the cannabis species -, this type of movement still does not happen on a large scale. Hypera, the largest pharmaceutical company in the country, has already filed a request for the commercialization of products based on the substance and is awaiting approval from Anvisa.
Its regulation is necessary for this market to advance. But the bill that deals with the matter, PL 399/15, has been stalled in Congress since 2015. Almost all Latin American countries are more advanced in terms of cannabis regulation. Uruguay, Colombia, Mexico, Argentina and Paraguay, for example, have already authorized cultivation in their territories, a fundamental step for business growth.
While we wait, investments in this market need to resort to companies listed on American stock exchanges, as is the case with the XP fund. BTG also entered this segment after the purchase, last year, of the Vítreo management, which already had an investment fund focused on cannabis.
But despite the difficulties, this market’s potential has not gone unnoticed by Theo van der Loo. He was Bayer’s President in Brazil from 2011 to 2018. When he left the company to retire, he finally found time to dedicate himself to studies on cannabis. Cautiously, he first invested in a company in Uruguay, until, in 2019, he founded NatuScience, an importer of products for the Brazilian market.
He currently dedicates around 70% of his time to the cannabis market. “It is a complex issue, with many opportunities, but also many risks due to the regulatory problem. How are you going to invest millions in clinical trials to develop the market if you are not sure that the market will continue to exist?”says he, who looked at cannabis as a business opportunity at the suggestion of his son.
Another executive who decided to bet his chips on this segment is José Roberto Machado. With 28 years of experience in the financial sector – 18 of them at Santander – he decided, two years ago, to leave his position as the bank’s director to start in the cannabis market. At first, as an investor in a crop in Uruguay; then, as an angel investor in the Brazilian operation OnixCann, where he also serves as a board member.
This market also attracts sports people. Tennis player Bruno Soares recently invested R$ 12 million in the Brazilian pharmaceutical company EaseLabs. “I felt on my own skin the benefits of cannabis for the problems I had as a high-performance athlete and, since then, it has been part of my routine”, he says, talking about his anxiety attacks and muscle inflammation.
Patrícia Villela Marino, married to Ricardo Villela Marino, a member of one of Itau Bank controlling families, is among the main cannabis investors in Brazil. Her relationship with the subject is old. In 2010, she led the creation of the Drug Policy Platform, supported by former President Fernando Henrique Cardoso, to discuss this issue in Latin America. In 2015, the platform turned into the Humanitas360 Institute, which covers this and other social issues.
It was never an easy task. “I was called a rich pothead countless times”, says Patrícia, who, in 2013, co-produced the documentary “Illegal”, about families fighting for access to medical cannabis for their children.
Currently, she invests in more than ten cannabis companies under the umbrella of the first accelerator of this market in Brazil, The Green Hub, where she is also the main investor. Her investment portfolio is shared with her husband. “The rich in this country don’t just want to make money, they also want to collaborate with its production of wealth and prosperity”, she says, noting that she herself invests millions in scientific research with the herb.
According to her, such research is urgent and necessary, both to develop the market and for Brazil to regain the leading role it has always had in the health area – as in the creation of generics, for example. For Patrícia, now is the time for companies to make their bet. “It’s no use simply importing raw materials and putting our label on to sell the medicine. We need to bet on scientific research and national production if we really want to build a national project”, she says.